The Stimulus Spin

Which projects did your government pay for?

In virtual reality, the economic stimulus looks like the product of
some idealized government of the future—transparent, accountable and
effective.

So it appears via the snazzy website of the New Mexico Office of
Recovery and Reinvestment. The site boasts charts, graphs and maps
galore, all set beneath Gov. Bill Richardson’s smiling portrait.

In reality reality, the Recovery Office exists in a drab, sparsely
furnished wing of a state office building. The only sign announcing the
presence of an agency overseeing $3.3 billion in taxpayer funds is a
black-and-white computer printout, much like an office reminder to clean
the break-room fridge. Inside, the place gets dumpier. For some reason,
cardboard has been taped over the men’s room trash can. Over one busted
urinal, another printout reads:

Careful
Valve stem sticks
Please jiggle if water keeps
running

Some might see the low-rent trappings as an encouraging sign of
governmental thrift. But considering that the whole point of the
stimulus is to, well, stimulate a stagnant economy through government
expenditures, busted plumbing doesn’t exactly scream “recovery.”

Congress passed President Barack Obama’s stimulus package—an $800
billion spending program officially known as the American Recovery and
Reinvestment Act—in February 2009. The following month, Richardson put
former Gov. Toney Anaya in charge of assessing proposals and tracking
the state’s stimulus haul, trusting him “to cut through the bureaucracy
and red tape.”

At a press conference back then, Richardson said, “We need to target
this money where it is needed most: creating jobs in New Mexico
communities.”

More than a year later, what have the billions bought?

First, due credit must be given to that cool website: Obama’s stimulus
delivers on its promise of transparency. Electronic reports made publicly available by the
state and federal recovery offices allowed SFR to examine the accounting
of New Mexico’s 1,900-plus stimulus-funded projects in detail. To see
what opportunities might’ve been missed, we reviewed thousands of pages
describing projects proposed by the public. We interviewed Anaya and
stimulus contractors. We fiddled with spreadsheets until our eyeballs
hurt.

After all that, this is what we learned. Here are six things New
Mexicans should know about the stimulus—and what it means for real
economic recovery.

1 The stimulus is
Godzilla, big and slow.
Nationwide stimulus spending is already bigger than the entire US
agricultural sector. It’s also way, way bigger than New Mexico: The
stimulus could buy everything produced or sold in the state three times
over with billions of dollars to spare. In the last fiscal year,
stimulus spending totaled roughly $280 billion—or $1.90 for every $100
spent on goods and services made within the US.

It would seem such fantastic sums simply must boost the economy, but
most of the money has yet to materialize in communities around the
country. As of the end of March, nearly 60 percent of the total
nationwide stimulus money had yet to enter the economy, according to the
nonprofit investigative journalism site propublica.org. In a sign of New Mexico’s relative sluggishness,
approximately 66 percent of the state’s $3.3 billion allocation has yet
to be spent.

At the same time, he blames some sluggishness on democracy itself. In
part to underscore Obama’s pledge of government transparency, the White
House set up special accounting rules for “recovery” funds, adding what
Anaya calls “horrendous reporting requirements” to existing federal
rules.

“As a country we insist on transparency, we insist on honesty—no fraud,
waste or abuse. All of that means process, and process translates into
delays,” Anaya says.

2 The recession is
King Ghidorah—even bigger.
In Obama’s first month as president, roughly 1 in 20 working-age New
Mexicans was out of a job.

One year and one stimulus package later, the number was closer to 1 in
10.

The New Mexico Department of Workforce Solutions calls recent job losses
“the worst the state has seen in modern times.” In 2008—before New
Mexico felt the consequences of the financial crisis and ensuing
recession—the state had 51,500 more private-sector jobs than exist
today, with roughly the same number of government jobs. An optimistic
blip in the latest state jobs release was evidently a departmental math
error; the department cautions that a slight unemployment decrease in
Santa Fe was a “temporary occurrence that will soon be reversed.”

In the past, “government jobs, along with private health services, could
be relied upon when jobs in other industries were failing,” a recent
state employment statistics release notes. Yet government jobs are
“flat”—even with the stimulus—and would be down were it not for the 2010
census.

Anaya believes the Recovery Act prevented disaster.

“Had it not been for ARRA, in New Mexico, I can tell you our
unemployment rate would be far, far worse than it is today. School
budgets would’ve been cut, law enforcement would’ve been cut, health
benefits would’ve been cut, teachers would’ve been laid off,” he says.

At the same time, Anaya’s job is partly to lower public
expectations—expectations that Democratic politicians spent the better
part of two years inflating.

“To think that ARRA could’ve turned everything around in one year is
just totally, totally unrealistic,” Anaya says.

US Rep. Ben Ray Luján, D-NM, takes a similar line. “Without the Recovery
Act, the unemployment rate would likely be much higher and families and
businesses would be facing even greater struggles—but make no mistake,
these are difficult times and much work remains to be done,” Luján
spokesman Mark Nicastre writes SFR in an emailed response to questions.

Likewise, US Sen. Jeff Bingaman, D-NM, says in an April 2 press
release that the stimulus “stopped the freefall.”

The state Recovery Office claims 10,221 people were employed last year
thanks to stimulus funding. By any practical standard, that wildly
exaggerates its effect.

What the stimulus does, at best, is buy time. “Recovery” and
“reinvestment” are better described as temporary patches for budget
holes in state and local governments all over the country. (The feds, in
turn, are borrowing against future growth, which is by no means
guaranteed.)

According to the federal recovery office database, there were 163
stimulus-funded projects in Santa Fe, representing an influx of $620
million into the economy. Again, though: It’s mostly budgetary backfill
for state agencies—preventing further cuts rather than creating new
jobs.

In any event, the astronomical numbers thrown around by the federal
recovery office only serve to obscure a more important question: What
has the stimulus done for you lately?

3 Now hiring (someone
else)!
Even in this government-heavy state, the private sector still employs 3
out of 4 New Mexicans. And most private-sector jobs the stimulus has
paid for require a highly specialized skill or certification. Here are
some sample job descriptions:

• A “postdoctoral scholar responsible for development and coding Monte
Carlo based time series analysis tools” (whatever that means)

• An “experienced researcher with specific

expertise in the evolution of information processing systems”

• A chemical engineer and a technician “responsible for processing
thin-film microcircuits on silicon wafers”

• A statistician

• A mechanical engineer

• Nine visiting artists, one “community artist,” and one “education and
outreach artist” at the Santa Fe Art Institute

• Four singer coaches, three career advancement coaches and two
theatrical coaches at the Santa Fe Opera

• Two laborers for a building renovation by the Native American Services
Corp.

STIMULUS MATH: (1-0) = (1 1)

There’s an important difference between the way the state
Workforce Solutions Department counts jobs and the way the Recovery
Office counts jobs. Workforce Solutions, much like the US Department of
Labor, counts jobs based on unemployment claims, quarterly tax reports
and surveys. The state Recovery Office estimates jobs “created or
retained” based on arcane and controversial formulas dictated by the
feds.
“We just follow their instructions and do what they tell us
to do,” Recovery Office Executive Director Toney Anaya says, asked about
the jobs formulas.

By the feds’ dubious math, hiring a new person is the same
as not laying someone off.

Do the rules provide any way to tell the difference between a
new job and a “retained” job?

“No,” Anaya tells SFR. “My guess—and it’s strictly an
educated guess—is that [the total jobs figure for New Mexico is] mainly
jobs saved rather than jobs created. But it accomplishes the same
effect.”

So far as SFR can tell, only $1.7 million in stimulus money has
actually been awarded and released to private sector organizations in
Santa Fe. On paper, that money funded 94.82 jobs. (Never mind
that Santa Fe County lost at least 1,100 jobs over the last year.)
The job figures are even less impressive when broken down.

Of those 95-odd jobs, 24 came through the AmeriCorps VISTA public
service program, which offers enlistees a one-year contract and a
stipend. In short, it’s more government backfill. (“Some of the VISTAs
have helped low income community members find inexpensive locally grown
produce,” a project description says. “Others have helped youth by
contributing to the development of afterschool programs for young
people.”)

Another 27 jobs—all but one of them in construction—were attributed to a
$2.2 million award to Presbyterian Medical Services in Santa Fe. A
closer look shows this “capital improvement” award actually paid for
multiple projects at PMS-owned facilities around the state. Two
sub-projects focus on roofing and interior remodeling at the Santa Fe
Community Guidance Center on Rodeo Park Drive. It’s unclear how many
local jobs they created.

The remaining 43 jobs include some of those technical positions, listed
above.

What about state jobs? After all, the state bureaucracy claims
two-thirds of New Mexico’s overall stimulus haul.

Even in the state capital, however, government work remains hard to
find.

Under its link for “stimulus jobs,” the State Personnel Office website
lists five positions funded specifically by ARRA. All those jobs were
evidently filled before the deadline because their online applications
had vanished from the SPO’s system when SFR checked.

However, some digging in the SPO system turns up approximately a dozen
more stimulus-funded jobs. Most of the new openings are for
child-support clerks around the state; the applications note that their
funding expires in September.

Whereas most agencies are simply trying to avoid further cuts, Anaya
says, both the Human Services Department and Workforce Solutions have
taken on new employees. They need the extra hands to cope with the
increased demand for food stamps and the spike in unemployment claims.

4 In Recoveryland,
everyone’s a temp.
Obviously, temporary work is better than no work at all. But what
happens to these stimulus jobs when their awards run out? Odds are, they
disappear, displacing workers once again.

Only three local stimulus-funded projects are recorded as “completed.”
Those projects created a grand total of 15.44 “jobs,” by the feds’
definition. That tally includes 11 temps who were hired last summer to
help people with the transition to digital television broadcasts.

“They were mostly college students,” Andrew Bartlett, co-owner of
Retriever Technology, the company that won the DTV transition contract,
tells SFR. “I liked them. I wish we could’ve kept some of them on.”

(For what it’s worth, Bartlett has been unable to get Channel 13 at his
house since the digital transition.)

The second completed project was more backfill: a $26,000 grant to St.
John’s College to fund its work study program. The money provided 1.6
temporary student jobs. (A college spokeswoman did not return SFR’s
message. The College of Santa Fe also got stimulus money for work study,
though that project is not recorded as “complete.”)

The third completed local project was a $750,000 award to DWG &
Associates to design and install a solar power array for the Army
section of the US National Guard base south of Santa Fe. According to
the feds, this created 2.84 jobs.

“One guy was missing a leg, so we only counted a portion,” DWG’s
Albuquerque-based project manager, Tim Anthony, jokes. (The real
explanation: Since reports are filed quarterly, employees who work on
part of a long-term project get accounted for as fractions.)

Anthony tells SFR his company retained two workers from the
project—which happens to be one of the few local stimulus awardees that
seems at all related to Obama’s “comprehensive plan to create a green
economy” and add “millions of new, good-paying jobs,” announced during
his presidential campaign.

So: Not counting government jobs “retained” and not counting temporary
work, it seems Santa Fe’s share of the stimulus has successfully created
only two new permanent, private-sector jobs—jobs reporting to a company
headquartered in Colorado Springs.

5 There’s not much
change in the stimulus.
The stimulus was sold as a grassroots endeavor. Announcing the Recovery
Office website, Richardson pledged that smart, “shovel-ready” ideas from
the public could receive government support. Thousands of proposals
came flooding in, overwhelming Anaya’s shoestring operation.

Guess which of the following three proposals the government wound up
paying for:

• A cat shelter

• A whiskey distillery

• A Star Trek-type fusion engine

The answer comes later. But first, Anaya wants to clear up “a lot of
misunderstanding” regarding the purpose of the Recovery Office.

His job is not to hand out money. Rather, Anaya likens the Recovery
Office role to that of a “traffic cop” for money flowing through other
agencies.

There was a lot of “hype” last year—“a lot of ‘shovel-ready-type
rhetoric,’ and ‘we’ve got to stimulate the economy,’ and so on,” Anaya
says. “What was not clearly explained…was that the money really came
down through state agencies to fund existing programs.”

Anaya takes partial responsibility for the resulting confusion. And he
says he’s read pretty much every proposal submitted by the
public—including SFR’s tongue-in-cheek pitch for a $50 million
“newspaper bailout.” (Beyond a couple of boilerplate emails, SFR heard
nothing particularly encouraging about its blatantly self-interested
proposal.)

But SFR’s review shows stimulus awards have largely gone to people who
already know how to work the existing labyrinth of bid notices and grant
applications—not to nafs who submitted ideas through the Recovery
Office website.

That said, many proposals from the public were perhaps less worthy than
projects developed within the bureaucracy—or at least, more
self-serving. For instance:

• Railyard Company principal Allen Branch requested $5 million in “new
funding” for the Market Station development, estimating that it would
create 275 jobs, though he didn’t say how.

• State Sen. Phil Griego, D-Los Alamos, signed his name to a $1 million
funding request by the nonprofit Santa Fe 400th Anniversary Committee,
which has since burned through $1.3 million in state and local grants to
produce what it generously estimates as a $700,000 “impact” on the
local economy. “I have seen the extensive plans for the 400th
Anniversary events…and feel certain they are ‘shovel-ready’ in every
way,” Griego wrote.

• Kevin DuPriest, president of a Rio Rancho company called VTOLE,
requested $750,000 to build “personal air vehicles” for up to two
people—flying cars that would require “no pilot license” and sell for
$50,000 each.

• Whitney Colby of Santa Fe requested $20 million to design, build and
operate a “solar battery-powered unmanned aerial vehicle for Border
Patrol surveillance.” (The government is already patrolling the
borderland skies with Predators.)

• An Eastern New Mexico University administrator requested $5.5 million
to have students build “a five story high alien spaceship attraction” to
be “shown in a crash-like orientation” in Roswell, with “working lights
and visual effects using state of the art solar power cells.” Students
would also build “alien statues on several downtown street corners.”
Together, the extraterrestrial art projects would create 1,050 jobs.
Supposedly.

Amid the dubious pitches for government largess, there were some clever
ideas—often pitched with more specificity and clarity than proposals
written by government officials, who knew a certain amount of stimulus
money would be coming their way no matter what.

Some of the unfunded proposals underscore the single most important
difference between the New Deal programs of Franklin Delano Roosevelt
and Obama’s stimulus: direct employment.

For example, G Benito Córdova of Española, author of a 2006 novel set in
Chimayó, proposed resurrecting the Great Depression-era programs that
employed his father and grandfather, the Works Progress Administration
and the Civilian Conservation Corps.

Members of Congress, too, are increasingly asking their policy staff how
they might reinstate the Depression-era job programs, according to a
Jan. 14 report by Congressional Research Service Labor Economics
Specialist Linda Levine.

Some 40 percent of unemployed Americans—3.3 million people—worked on WPA
projects in 1936, the tail end of the Depression. Another 500,000,
mostly “young single men,” joined the CCC, which put them to work
clearing trails, stocking fish and digging ditches in national parks and
forests.
In many ways, the WPA outperformed a similarly named program called the
Public Works Administration, which was organized much like today’s
stimulus.

“The PWA operated almost completely by awarding grants to states,
municipalities, and other public agencies, which in turn entered into
contracts with private employers; this resembles the dissemination of
much federal infrastructure spending today,” Levine writes. “In
contrast, the WPA, by hiring participants onto the federal payroll, was
able to ensure that jobs went to the needy unemployed.”

By cutting out the middlemen, the WPA also made more efficient use of
taxpayer dollars than its stimulus-like counterpart, creating jobs at
one-quarter of the cost.

So maybe those Roswell alien statues aren’t such a bad idea after all.

Paying college students to sculpt would certainly creates more jobs than
the City of Santa Fe’s decision to spend approximately $100,000 in
stimulus funds installing security cameras on transit buses. (The
largest provider of transit surveillance systems is GE Security, a
company that steadily laid off workers at US manufacturing plants prior
to its sale this year to UTC, a multinational conglomerate with
operations in 35 countries.)

Likewise, growing fruits and vegetables, as proposed by several
organizations, would create more jobs than the Santa Fe County Sheriff’s
Office decision to drop $76,000 in stimulus money on a “Rapid
Deployment Vehicle” for its SWAT team, plus 22 new Tasers for its
deputies—zero local jobs there, too.

6But there is a
little bit of hope.
A few small local programs seem to deliver on something like the
green-tinged future Obama promised during his campaign.

The stimulus kicked $32,000 toward Santa Fe County’s new Renewable
Energy Financing District. This clever program leverages the local
government’s borrowing power to cover the large up-front costs of
installing solar, wind or geothermal energy systems for private property
owners. The idea was first enacted in 2008 in Berkeley, Calif., thanks
to academics there, some of whom have gone on to work in the Obama
administration.

Per the Recovery Office accounting, the project directly created no
jobs. Nevertheless, the benefits are evident.

Stimulus money has also provided temporary work and training to a handful of
so-called “at-risk” youth in a residential energy-efficiency
program organized by YouthWorks! and the Santa Fe Community Housing
Trust. Housing Trust Resource Development Manager Daniel Werwath
submitted that proposal through the state Recovery Office website;
eventually, it received $60,000 through the city’s portion of the
stimulus.

In that case, at least, the system worked as promised.

Another local energy project is far bigger in scale—in fact, it is the
largest private-sector stimulus project in Santa Fe. This project is
also the answer to the question posed in item No. 5.

The US Navy awarded $7.9 million in stimulus funds to the Energy/Matter
Conversion Corporation, which has an office on E. Alameda Street. The
award subsidizes eight jobs (including that computational physicist
mentioned earlier), funding phase two of the corporation’s three-phase
endeavor.

This phase will conclude with the design and building of the “WB-8
Polywell device,” a nuclear fusion reactor envisioned by the
corporation’s founder, Robert W Bussard, who died at his home in Santa
Fe in 2007. Bussard’s wife, Dolly Gray, co-founded his company and
carries on his work. The late scientist’s rocket designs earned him
immortality as the namesake of a fictional propulsion system for the
Starship Enterprise—hence the Star Trek reference.

The Navy contract calls for the corporation to not only build and test a
new fusion device, but also write a report on “the conceptual
requirements for a Polywell fusion reactor capable of generating
approximately 100mW.” That would provide roughly the output of a large
coal-fired power plant, minus the air pollution (and without the
dangerous type of radioactive waste produced by existing fission
technology).

Success in phase three, the corporation’s website flatly states, “marks
the end of fossil fuels.” That would make this local stimulus project,
if successful, the most cost-efficient government program of all time.

There’s no consolation prize for the Edgewood Animal Shelter Task Force,
which requested $500,000 to help build an enormous animal control
facility to include “48 outside dog runs and an indoor cattery.” (It was
maybe a hard sell, considering that St. Elizabeth Shelter in Santa Fe—a
shelter for homeless humans—requested a relatively modest $356,000 for
rooftop solar panels.)

And sorry, whiskey aficionado: Josefo Martinez tells SFR he never got a
response to his $600,000 stimulus proposal for a distillery.

“I guess they turned me down,” Martinez, owner of Summit Builders in
Santa Fe, says. He knows some people might object to public funding for
hard liquor, given New Mexico’s drunk driving problem, but argues that
local leaders must “think out of the box” to develop a manufacturing
base.

Perhaps it was a missed opportunity. Martinez promises that his father’s
whiskey recipe will “knock you out of your pants.” SFR